States With The Best And Worst Banking Access

Access to safe and affordable banking services can help consumers better manage their finances. Unfortunately, not everyone in the U.S. has equal access.

Several factors impact whether a person is unbanked—meaning they don’t have a bank account—including whether a trusted bank or credit union is in their area and how many payday loan services, check-cashing agencies and other predatory lenders are nearby.

To determine the best and worst states for banking access, Forbes Advisor compared all 50 states and the District of Columbia across five metrics: banks and credit unions per capita, predatory lenders per capita, percentage of unbanked residents, change in the percentage of unbanked residents and percentage of residents without internet access (for access to online banking).

Top 10 Best States For Banking Access

1. Vermont

Score: 100 out of 100

Vermont ranks highest for banking access among all 50 states and Washington, D.C. Several factors contribute to convenient banking access in the Green Mountain state, as you can see from its various positive rankings:

• 12th-highest number of banks and credit unions per 100,000 residents
• 12th-lowest share of unbanked households (2.50% in 2021)
• 20th-highest population of households with access to the internet

Perhaps most crucially, Vermont has the lowest prevalence of predatory lending, payday lending and check cashing services due to consumer-friendly state laws that prohibit such businesses.

2. Maine

Score: 95.91 out of 100

Nearly all Maine residents have at least one bank account. The state's percentage of unbanked households dropped from 2.30% in 2019 to an impressive 1.30% in 2021.

The Pine Tree State has the fourth-lowest number of predatory lending establishments per 100,000 residents and is ranked 24th-lowest for its percentage of households with no internet access (9%).

3. New Hampshire

Score: 94.13 out of 100

Third on our list is New Hampshire, which saw a significant drop in its share of unbanked households during the years studied, from 5.00% in 2019 to 1.40% in 2021. New Hampshire also notably ranked third-lowest for the number of predatory lending establishments per 100,000 residents.

While the Granite State ranks OK (38th-highest) when it comes to the number of banks and credit unions, it ranks first for internet access. Only 5.90% of New Hampshirites lack internet access, meaning the vast majority of residents can potentially use online banking tools.

4. Arkansas

Score: 90.93 out of 100

Like several other states at the top of our list, Arkansas saw a noteworthy drop in its unbanked households from 2019 to 2021 (7.10% to 3.40%). The Natural State is now ranked second best for that metric.

Arkansas can also boast that it has the fifth-highest number of banks and credit unions per capita and the fifth-lowest number of predatory lending establishments per capita.

5. West Virginia

Score: 88.97 out of 100

West Virginia stands out for its relative lack of predatory lending establishments, ranking second-lowest for this key metric.

The Mountain State is better than average by other measures as well, ranking 11th-highest for the number of banks and credit unions per 100,000 residents and 14th-lowest for its share of unbanked households (3.00%).

6. Montana

Score: 87.72 out of 100

While Montana is one of the least populated U.S. states, Montanans still have comparatively good access to banking. In 2021, only 3.00% of households in the state were unbanked, making it the 14th-lowest on our list for its share of unbanked households.

The Treasure State comes in 10th-highest for the number of banks and credit unions per 100,000 residents, while it ranks sixth-lowest for its density of predatory lending establishments.

7. North Dakota

Score: 86.48 out of 100

North Dakota ranks higher than any other state (and Washington, D.C.) when it comes to banks and credit unions per capita. The state has roughly 64 banks and credit unions for every 100,000 residents.

In 2021, only 3.20% of households were unbanked in the Peace Garden State, and it ranks 15th-lowest for the number of predatory lending establishments per 100,000 residents.

That access can come in extra handy for North Dakotans, considering that an analysis of the best states for saving money from Forbes Advisor found North Dakota to be the friendliest state to savers thanks to its low debt-to-income ratio and housing costs.

8. South Dakota

Score: 86.12 out of 100

South Dakota comes in just behind North Dakota for the number of banks and credit unions per capita, putting it in second place on that list. The percentage of unbanked households in this Midwest state fell from 4.90% in 2019 to 3.70% in 2021.

Despite the prevalence of banking institutions in South Dakota, the state ranks 10th-lowest for the number of predatory lending establishments per capita.

9. Washington, D.C.

Score: 85.05 out of 100

Washington, D.C., comes in sixth for its number of banks and credit unions per 100,000 residents, but the nation's capital falls toward the middle of the pack on several other metrics.

While the D.C.'s share of unbanked households dropped from 8.00% in 2019 to 4.50% in 2021, 7.00% of households still lack internet access. D.C. also ranks 21st-lowest for the number of predatory lending establishments per capita.

10. Minnesota

Score: 82.74 out of 100

Only 2.40% of Minnesota's households were unbanked in 2021, making it the 11th-lowest on our list for its percentage of unbanked residents. The state also does well by other measures, with the 12th-lowest rankings for both its density of predatory lending establishments and share of households with no access to the internet.

The Gopher State ranks 24th-highest for the number of banks and credit unions per 100,000 residents.

Top 10 Worst States For Banking Access

1. South Carolina

Score: 0 out of 100

South Carolina was the only state to receive zero points across all five of our metrics for banking access, making it the worst-ranked locale on the list.

A combination of factors stand as roadblocks to banking for residents of the Palmetto State. Here's how South Carolina fared on key measures:

• 7th-highest number of predatory lending establishments per capita
• 11th-highest share of unbanked households, at 5.50% in 2021
• 20th-lowest number of banks and credit unions per capita (roughly 32)
• 8th-highest share of households with no access to the internet (10.80%)

2. Nevada

Score: 1.07 out of 100

Nevada has only 20 banks or credit unions for every 100,000 residents, putting it at the bottom of our list for that metric. In 2021, 5.60% of Nevada's households were unbanked.

At the same time, Nevadans are exposed to predatory lending. The Silver State ranks 13th-highest for the number of predatory lending establishments per 100,000 residents.

3. New Mexico

Score: 2.67 out of 100

7.00% of New Mexico's households were unbanked in 2021, which puts the state at fourth-highest on our list for its share of unbanked households.

Internet access is also an obstacle in the so-called Land of Enchantment. At 13.20%, New Mexico has the fourth-highest share of households with no access to the internet.

As for access to financing, some New Mexicans may find it easier to locate a predatory lender than a reputable bank. The state ranks 11th-lowest for the number of banks and credit unions per 100,000 residents (28), but it’s 22nd-highest for predatory lending establishments.

4. Louisiana

Score: 6.76 out of 100

Louisiana ranks near the top of the list for several unfavorable metrics used in our analysis. The state had the second-highest share of unbanked households in 2021 (8.10%). It also has the third-highest number of predatory lending establishments per capita and the second-highest share of households without internet access (14.50%).

However, the Pelican State ranks in the middle of the pack (34th-highest) for its number of banks and credit unions per 100,000 residents.

5. Texas

Score: 7.83 out of 100

Texas ranks near the bottom of the list when it comes to the number of banks and credit unions per capita, at eighth-lowest. Like several other states with low bank density, the state ranks high for its number of predatory lending establishments as the 10th-highest on our list.

The Lone Star State also had the eighth-largest share of unbanked households in 2021, with 5.60% of households lacking both a checking and a savings account.

6. New York

Score: 9.07 out of 100

It may come as a surprise that the state of New York ranked poorly for several measures of banking access. In addition to being one the worst states for saving money, the Empire State has the seventh-highest percentage of unbanked households (5.90%) and the fifth-lowest number of banks and credit unions per capita.

However, New York is roughly average by other measures. The state ranks  27th-highest for the number of predatory lending establishments per capita and 21st-lowest for its share of households without internet access.

7. Mississippi

Score: 11.39 out of 100

Mississippi has the worst ranking across several metrics for banking access. Although the Magnolia State has the ninth-highest number of banks and credit unions per capita, it also earned these unfavorable designations:

• Highest percentage of unbanked households (over 11.00%)
• Highest number of predatory lending establishments per 100,000 residents (about 14)
• Highest share of households with no access to the internet (15.60%)

8. Arizona

Score: 17.26 out of 100

Arizonans may have an especially difficult time finding a bank or credit union near home. While only 3.60% of the state's households were unbanked in 2021, Arizona still ranks second-lowest for the number of traditional financial institutions per capita. Meanwhile, it has the 20th-highest number of predatory lending establishments per 100,000 residents.

9. Missouri

Score: 18.15 out of 100

Missouri ranks third-highest for its share of households that were unbanked in 2021, at 7.40%. That same year, 10.30% of households in the state were without internet access.

One metric in which the Show-Me State performed well was banks and credit unions per capita. Missouri ranked 13th-highest, with roughly 41 banks and credit unions per 100,000 residents. However, it also has the ninth-highest number of predatory lending establishments per capita.

10. Tennessee

Score: 20.28 out of 100

Rounding out our bottom 10 is Tennessee, where 5.00% of households were unbanked in 2021. Like Missouri, 10.30% of households in Tennessee have no internet access, but the Volunteer State ranks higher (2nd) for the number of predatory lending establishments per capita.

Tennessee performed better on the banks and credit unions per capita metric, with about 37 per 100,000 residents, which puts the state at the 19th-highest on our list.

Tips To Find the Best Bank or Credit Union for Your Needs

When looking for a bank, you may be tempted to choose the one in your neighborhood. But the difference between the best banks and the worst banks in America has little to do with location. Here are some key things to look for when deciding where to bank.

• Membership requirements: Most credit unions have requirements to qualify for membership, which often depend on your employer, where you live or your relationship with a current member.
• Fees: Pay attention to the various fees, including monthly account fees, ATM fees and fees charged if your deposited funds drop below a certain dollar amount.
• Interest rates: Rates vary by bank and by account, so you'll want to see how much you can earn on the account you plan to open, whether you’re starting with a checking account, high-yield savings account, CD or money market account.
• Customer ratings: Read reputable bank reviews and customer reviews on the Better Business Bureau (BBB) website and Trustpilot for a heads-up on the best and worst banks to bank with. You can also check out this list of the most popular banks in your state.
• Accessibility: Check if there are branches and ATMs near your work and home and if a bank or credit union offers an app compatible with your phone.

How a Checking or Savings Account Can Be Helpful for Money Management

The banks with the worst security are piggy banks or envelopes stashed under a mattress or in the back of a sock drawer. If you store your cash this way, it can be stolen, misplaced or destroyed in a fire. For better security and convenience—and interest-earning potential—keep your money in a checking or savings account.

A fee-free bank account can be an essential financial tool since, without one, you may have to use costly, time-consuming or even predatory alternatives just to make everyday payments and access your paycheck.

For example, you may need to purchase a money order or visit a check-cashing service, where you can be charged fees up to 9.90% of a check amount.

Other benefits of having a bank account include:

• Insurance: Most accounts are covered by FDIC or NCUA insurance to protect your money against loss, theft or damage.
• Convenience: You can set up recurring automatic payments and make it easier to complete transactions online.
• Rate discounts: Get access to relationship discounts on financing, which are available to members of many banks and credit unions.
• Earn interest: Even if you earn minimal rates on your deposits, any interest can help offset inflation.

Tips for Using Online-Only Banks

It’s possible to get all of your banking needs met through an online-only bank, but you may also find it ideal to have a combination of online and traditional bank accounts.

If you don't need to deposit or withdraw physical cash, you could benefit from choosing an online bank versus a traditional bank because online banks typically have higher interest rates on accounts, plus lower fees.

To get the most out of digital banking, make sure an online bank offers the types of accounts you're looking for. Pay attention to any limits on the number of withdrawals you can make, as well as minimum deposit requirements, fees and interest rates.

Methodology

To determine the states with the best and worst banking access, Forbes Advisor examined data for all 50 states and Washington, D.C. We considered five relevant metrics and weighted them as follows:

• Number of banks and credit unions per 100,000 residents (30% of total score): Data comes from the U.S. Census Bureau’s 2021 County Business Patterns database.
• Predatory lenders per 100,000 residents (30% of total score): Data comes from the U.S. Census Bureau’s 2021 County Business Patterns database. This includes payday lending services and check-cashing services, among other lenders that are not banks or credit unions. A higher number of “other lenders” per 100,000 residents was considered detrimental to banking access.
• Percentage of unbanked households (20% of total score): Data comes from the 2021 FDIC National Survey of Unbanked and Underbanked Households. An “unbanked” household means that no one in the household had a checking or savings account at a bank or credit union.
• Change in share of unbanked households (2019-2021) (5% of total score): Data comes from the 2021 FDIC National Survey of Unbanked and Underbanked Households. For this metric, we calculated the percentage point change from 2019 to 2021, which was the most recently available data at the time of our research.
• Percentage of households with no internet (15% of total score): Data comes from the U.S. Census Bureau’s 2022 1-Year American Community Survey. With the rise of online-only banks, internet access has become increasingly important for banking access.

Based on these five metrics and the weighting outlined above, we determined a ranking for all 50 states and Washington, D.C.